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Blue Cross and Blue Shield influence waning with N.C. lawmakers

Blue Cross and Blue Shield of North Carolina is used to having considerable clout in the legislature. Although the state’s largest health insurer hasn’t always gotten its way, for years it has negotiated behind the scenes to mold bills more to the company’s liking.

All that’s changed. Blue Cross has seen bills fly out of committee with its wishes ignored repeatedly this session.

The latest showdown was this past week over a bill that requires private insurance plans and the state employee health plan to cover autism. Blue Cross and other insurers lobbied against it in the House Insurance Committee on Tuesday to no avail. On Wednesday, lawmakers in the full House gave it overwhelming support and sent it to the Senate.

Mark Fleming, a Blue Cross lobbyist, told committee members Tuesday that the company already covers autism treatment, including physical, occupational and speech therapy. But the bill would require the company to cover a treatment called applied behavioral analysis, techniques that teach people with autism basic and academic skills – something Blue Cross did not think should be covered by health insurance.

“If you were to pass this bill, this will be the first time the state of North Carolina has covered educational programs,” Fleming said. “We question the appropriateness of educational services designed to assist with behaviors like getting dressed, eating meals, and sitting still during class be included as part of medical health insurance.”

John Burress of Winston-Salem, who helped start a school for autistic children, countered that the treatment was effective. “This is not educational; it is not optional. It is there because of a doctor’s prescription.”

The loss came on top of one from the previous week, again in the House. That bill, HB 609, requires insurance companies to pay for oral anti-cancer drugs just as they do chemotherapy delivered in a hospital or doctor’s office. The insurer did win a small concession that time – permission to charge up to $300 per prescription – after Blue Cross argued that similar laws in other states had allowed patients to get oral chemotherapy at no cost.

Rep. Justin Burr, an Albemarle Republican, co-sponsored the cancer drug bill and another bill Blue Cross didn’t like that bans “most favored nation” contract clauses that insurance companies use to get rates with providers that are as good or better than competing companies. The contract bill passed the House and Senate overwhelmingly and is now a law.

Burr attributes the change in Blue Cross’ clout to the considerable turnover in the legislature. The N.C. Center for Public Policy Research counted 16 new senators this session out of 50, and 45 new House members among the 120.

The absence of a long history with a group or industry means lawmakers take a fresh approach to issues, Burr said.

“The great thing about it is they’re not tied to any particular group,” he said of the new legislators.

The insurance behemoth, along with the UNC system and the N.C. Hospital Association are among the institutions that have seen their influence erode in the past four years. Blue Cross lost an important ally when former Sen. Tony Rand, a Democrat who was majority leader and Rules Committee chairman, resigned in 2009. No other legislator has stepped in to run interference for the company.

Still, the company’s political action committee remains a big donor to political campaigns. From 2010 through 2012, the Blue Cross PAC contributed $238,500 to candidates for legislative seats and statewide office.

When contacted for an interview about company officials’ view on of their new status in the legislature, Blue Cross sent this statement:

“We fight every day to improve health care and rein in costs on behalf of our 3.7 million customers, just as other groups represent the interests of theirs. Sometimes those interests are at odds, and you don’t always win. That’s nothing new for the legislature or for Blue Cross.”

Adam Searing, director of the N.C. Health Access Coalition at the N.C. Justice Center, said Blue Cross has lost clout. But it appears to him that the company has divided its focus to adapt to changes coming when the new federal health care law is fully effective next year. For example, the company has a campaign that tells people why health care costs are so high.

“It almost seems to me that their focus is a little more away from the legislature,” Searing said.

News researcher David Raynor contributed.

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